FIU Law Review
Volume 5 | Number 2
Article 10
Spring 2010
The Potential of Rulemaking by the NLRB
Jeffrey S. Lubbers
American University’s Washington College of Law
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Jeffrey S. Lubbers, The Potential of Rulemaking by the NLRB, 5 FIU L. Rev. 411 (2010).
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The Potential of Rulemaking by the NLRB
Jeffrey S. Lubbers
I.
*
INTRODUCTION
It is striking to note that there seems to be more Labor Law noticeand-comment rulemaking in the People’s Republic of China than there is in
the National Labor Relations Board (NLRB).
In May 2008, the Legislative Affairs Office of China’s State Council
released a draft of Regulations on the Implementation of Labor Contract
1
Law and began seeking public comments. The Regulations consist of
forty-five articles, mainly including provisions on open-term labor con2
tracts, economic compensation, outsourced labor, etc. I later learned that
3
82,000 “opinions” from the public were received.
*
Jeffrey S. Lubbers is a Professor of Practice in Administrative Law at American University’s
Washington College of Law. This article was prepared for the FIU Law Review Symposium, Whither
the Board? The National Labor Relations Board at 75, March 26, 2010.
1
See “Labor Contract Law Implementation Regulations Opened for Public Comment,” XINHUA
NEWS (May 9, 2008), available at http://www.csrlaws.com/reports-71.html (announcing that release).
The Labor Law Contract itself was adopted at the 28th Session of the Standing Committee of the 10th
National People’s Congress of the People’s Republic of China on June 29, 2007 and entered into force
as of January 1, 2008. See Li & Fund Research Centre, China’s Newly Adopted Labor Contract Law,
China Distribution and Trading, at 3 (July 2007), available at http://www.idsgroup.com/profile/pdf/
distributing/issue42.pdf (reporting that 190,000 responses were received in a month). I should hasten to
add that, while China is making significant progress in obtaining public comment on proposals, it lacks
an administrative procedure act that requires agencies to respond to such comments or allows adversely
affected persons to seek judicial review of these sorts of “normative acts.” See Peter Howard Corne,
Creation and Application of Law in the PRC, 50 AM. J. COMP. L. 369, 387 (2002) (describing the consultation process but opining that “the key problem remains that the drafters, despite extensive solicitation for public comment and consultation, may decide not to take the comments on board”); John
Ohnesorge, Chinese Administrative Law in the Northeast Asian Mirror, 16 TRANSNAT’L LAW &
CONTEMP. PROBS. 103, 148 (2006) (describing the government’s resistance to judicial review).
2
See generally Gregory Sy, Implementation Regulations For the Labor Contract Law of the
People’s Republic of China – A Summary, http://ezinearticles.com/?Implementation-Regulations-Forthe-Labor-Contract-Law-of-the-Peoples-Republic-of-China-A-Summary&id=1545454
(summarizing
the final regulations).
3
See Procedures Guidelines for Public Opinion Solicitation in Administrative Legislation
through Mass Media like Internet and Newspapers, at 3 (unsigned, undated briefing paper received from
Chinese government for conference in Beijing, March 4-5, 2010, on file with author).
411
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In contrast, although the NLRB has clear statutory authority to use
4
rulemaking, its last major successful substantive rulemaking was
completed in 1989, when the Board issued a rule specifying the collective
5
bargaining units in acute-care health care facilities – a rule that was upheld
6
by the Supreme Court in NLRB v. American Hospital Ass’n. Since then the
Board has proposed but withdrawn two other substantive rules. One, a rule
to implement the Supreme Court’s decision in Communications Workers v.
7
8
9
Beck, was proposed in September 1992 and withdrawn in 1996. The other, concerning the appropriateness of single location bargaining units in
certain industries, was floated in an advance notice of proposed rulemaking
10
11
12
in 1994, proposed in 1995, and withdrawn in 1998. Other than those
two failed attempts, in the past 20 years, the Board has issued a smattering
of procedural, privacy, and housekeeping rules – mostly as final rules – and
13
has used the notice-and-comment process only 17 times.
This seems curious since the Board clearly has broad discretion to
make policy either by rulemaking or adjudication. Over the years, the
Supreme Court and lower courts have basically upheld the legality of
policymaking by adjudication (with some limits on application of newly
4
29 U.S.C. § 156 (2006) (“The Board shall have authority from time to time to make, amend,
and rescind, in the manner prescribed by subchapter II of chapter 5 of title 5, such rules and regulations
as may be necessary to carry out the provisions of this subchapter.”).
5
See Collective Bargaining Units in the Health Care Industry, 54 Fed. Reg. 16,336 (Apr. 21,
1989) (to be codified at 29 C.F.R. pt. 103).
6
NLRB v. Am. Hosp. Ass’n., 499 U.S. 606 (1991); see also Mark H. Grunewald, The NLRB’s
First Rulemaking: An Exercise in Pragmatism, 41 DUKE L.J. 274 (1991) (providing a comprehensive
analysis of the rule making challenged in NLRB v. Am. Hosp. Ass’n and the ensuing litigation).
7
Commc’n Workers v. Beck, 487 U.S. 735 (1988).
8
See Union Dues Regulations 57 Fed. Reg. 43,635 (proposed Sept. 22, 1992) (to be codified at
29 C.F.R. pt. 103) (following 57 Fed. Reg. 7897 (proposed Mar. 5, 1992) (an earlier advance notice of
proposed rulemaking)).
9
See Rules and Procedures for the Implementation of Commc’n Workers v. Beck, 61 Fed. Reg.
11,167 (proposed Mar. 19, 1996) (to be codified at 29 C.F.R. pt. 102); see also, Scott A. Zebrak, Comment, The Future of NLRB Rulemaking: Analyzing the Mixed Signals Sent by the Implementation of the
Health Care Bargaining Unit Rule and by the Proposed Beck Union Dues Regulation, 8 ADMIN. L.J.
AM. U. 125, 147-58 (1994) (analyzing the Board’s rulemaking response to Beck prior to its subsequent
withdrawal of the rule).
10 See Appropriateness of Requested Single Location Bargaining Units in Representation Cases,
59 Fed. Reg. 28,501 (proposed June 2, 1994) (to be codified at 29 C.F.R. pt. 103).
11 See Appropriateness of Requested Single Location Bargaining Units in Representation Cases,
60 Fed. Reg. 50,146 (proposed Sept. 28, 1995) (to be codified at 29 C.F.R. pt. 103).
12 See Rules Regarding Standardized Remedial Provisions in Board Unfair Labor Practice Decisions and the Appropriateness of Single Location Bargaining Units in Representation Cases, 63 Fed.
Reg. 8890 (proposed Feb. 23, 1998) (to be codified at 29 C.F.R. pt. 103).
13 In the twenty years from 1990 to the present, a search of Westlaw by the author on May 10,
2010 [NLRB & “proposed rule” & da(aft 1989)] revealed that the Board has only issued about 30 rulemaking documents, which were most of the procedural or housekeeping rules that were issued as final
rules without notice and comment.
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The Potential of Rulemaking by the NLRB
413
announced policies to parties before the Board who might have relied on
14
the law as it was). And its authority to issue rules was upheld by a unanimous Supreme Court (affirming the Seventh Circuit’s decision authored by
15
Judge Posner).
One would think that the Board would have taken its hard-earned victory in the Supreme Court and built on it. Indeed, Professor Mark
Grunewald, in his study prepared for the Administrative Conference of the
United States in the aftermath of the Board’s victory in the Supreme Court,
wrote that “[t]he Board’s institutional resolve against substantive
rulemaking appeared to have collapsed, and it was possible to imagine
wide-ranging and vigorous use of this previously dormant policymaking
16
device in the labor relations area.”
However, this vision has not materialized. Instead the Board maintained its resistance to rulemaking, despite its apparent success in the health
care bargaining unit rule. Other than that rule, codified at 29 C.F.R. §
103.30, the Board’s CFR chapter only contains three other substantive rules
(listed in Part 103 under the heading, “Other Rules”). These cover jurisdic17
tional standards for colleges and universities, and two relatively insignifi18
19
cant workplaces – symphony orchestras, and horse/dog racing.
14 See N.L.R.B. v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) (holding that normally “the
choice between rulemaking and adjudication lies in the first instance in the Board’s discretion); NLRB v.
St. Francis Hosp., 601 F.2d 404 (9th Cir. 1979) (holding that the Board could announce a prospective
policy in an adjudication, but had to allow parties in subsequent enforcement actions to challenge application of the policy to them).
15 N.L.R.B. v. Am. Hosp. Ass’n., 499 U.S. 606 (1991), aff’g 899 F.2d 651 (7th Cir. 1990).
16 Grunewald, supra note 6, at 276.
17 Colleges and Universities, 29 C.F.R. § 103.1 (2009). According to the final rule preamble, the
proposed rule received 33 comments. Colleges and Universities, 35 Fed. Reg. 18,370 (Dec. 19, 1970).
18 Symphony Orchestras, 29 C.F.R. § 103.2 (2009). According to the final rule preamble, the
proposed rule received 26 comments. Jurisdictional Standards Applicable to Symphony Orchestras, 38
Fed. Reg. 6176 (Mar. 7, 1973).
19 Horseracing and Dogracing Industries, 29 C.F.R. § 103.3 (2009). This rule simply announced
that the Board would not assert jurisdiction under in any proceeding under sections 8-10 of the NLRA
involving these industries. The final rule preamble, did not disclose how many comments were received
on the proposal. See Horseracing and Dogracing Industries, 38 Fed. Reg. 9507 (Apr. 17, 1973). Two
other rules in the part are really procedural rules: one on posting of election notices (29 C.F.R. §
103.30), and another on notices concerning offers of reinstatement to military employees (29 C.F.R. §
103.100). There are three other parts in the NLRB’s CFR chapter: “Administrative regulations,” (29
C.F.R. pt. 100), “Statement of procedures” (pt. 101), and “Rules and regulations, Series 8” (pt. 103). All
of these rules concern rules of practice before the Board and other procedural and housekeeping
measures.
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II. THE BOARD’S CONSISTENT HISTORY OF SHRUGGING OFF CRITICISM
BY COMMENTATORS
This is not a new issue for the Board. It has always made policy
primarily through case-by-case adjudication. Professor Grunewald’s article
lists nine articles criticizing the Board for not making greater use of rule20
making, starting with Cornelius Peck’s 1961 article, “The Atrophied
21
Rulemaking Powers of the National Labor Relations Board” and only one
22
that defends the Board’s practice. Indeed, in the face of this criticism by
23
commentators it has justified this posture in legal briefs.
Nor is the NLRB alone in being criticized for over-reliance on policymaking through adjudication. As one commentator has concluded:
The use of administrative adjudication as a significant means of
agency lawmaking has been the subject of sustained academic
critique. In a series of articles spanning more than a half century, academic commentators have argued that agency lawmaking through
adjudication suffers from a number of significant drawbacks –
including decreased public participation, a lack of prospectivity, lesser
transparency or predictability for regulated entities, and a tendency to
arise in fact-bound circumstances – which make it inferior to legisla24
tive lawmaking by administrative agencies.
20 Grunewald, supra note 6, at 274-75, n.3 (citing Merton C. Bernstein, The NLRB’s Adjudication-Rule Making Dilemma Under the Administrative Procedure Act, 79 YALE L.J. 571 (1970); Samuel
Estreicher, Policy Oscillation at the Labor Board: A Plea for Rulemaking, 37 ADMIN. L. REV. 163
(1985); Kenneth Kahn, The NLRB and Higher Education: The Failure of Policymaking Through Adjudication, 21 UCLA L. REV. 63 (1973); Charles J. Morris, The NLRB in the Dog House—Can an Old
Board Learn New Tricks?, 24 SAN DIEGO L. REV. 9 (1987); Cornelius J. Peck, A Critique of the National
Labor Relations Board's Performance in Policy Formulation: Adjudication and Rule-Making, 117 U.
PA. L. REV. 254 (1968); Cornelius J. Peck, The Atrophied Rulemaking Powers of the National Labor
Relations Board, 70 YALE L.J. 729 (1961); David L. Shapiro, The Choice of Rulemaking or Adjudication
in the Development of Administrative Policy, 78 HARV. L. REV. 921 (1965); Carl S. Silverman, The Case
for the National Labor Relations Board’s Use of Rulemaking in Asserting Jurisdiction, 25 LAB. L.J. 607
(1974); and Berton B. Subrin, Conserving Energy at the Labor Board: The Case for Making Rules on
Collective Bargaining Units, 32 LAB. L.J. 105 (1981).
21 Cornelius J. Peck, The Atrophied Rulemaking Powers of the National Labor Relations Board,
70 YALE L.J. 729 (1961).
22 Robert L. Willmore, Note, NLRB Rulemaking: Political Reality Versus Procedural Fairness, 89
YALE L.J. 982 (1980).
23 See Zebrak, supra note 9, at 129 (describing the NLRB’s brief in the Supreme Court case of
NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969)).
24 Katie R. Eyer, Administrative Adjudication and the Rule of Law, 60 ADMIN. L. REV. 647, 649
(2008). She notes the very early article by Milton Handler, Unfair Competition, 21 IOWA L. REV. 175,
259-61 (1936) suggested that it would be preferable for the Federal Trade Commission to make law
through legislative lawmaking rather than through adjudication. Also on this subject she cites William
T. Mayton, The Legislative Resolution of the Rulemaking Versus Adjudication Problem in Agency Law-
2010]
The Potential of Rulemaking by the NLRB
415
In 1986 then-ACUS General Counsel Richard K. Berg provided a
classic listing of the respective advantages between adjudication and rule25
making for policy making purposes. He began by saying that neither
mode “is an inherently superior mode of decisionmaking for all occa26
sions.” With respect to adjudication, he said that it is the “better suited for
intensive exploration of factual disputes and perhaps for resolving narrow
27
policy issues involving limited numbers of contestants.” He pointed out
that, with respect to formal adjudication at least, “the party most immediately affected has substantially greater procedural rights than he would have
28
in rulemaking.” He also said that adjudication “lends itself to an incremental kind of policymaking, in which conclusions formed in one case are
29
tested and applied or perhaps modified in another case.”
Berg then went on to describe the advantages of rulemaking “where
the agency is faced with an issue of potentially broad application or effect.”
His catalogue of “frequently cited” reasons include:
1. “Rulemaking with its wider notice and broader opportunities for
participation is fairer to the class of persons who would be affected by
a new ‘rule’ than if the rule were formulated in an adjudication. Such
broader participation also makes rulemaking more efficient as a way
for the agency to gather information.”
2. Because rulemaking is normally prospective it is superior as a
means of making new policy.
3. A generally applicable rule can provide “greater clarity to those
affected as well as greater uniformity in enforcement.”
making, 1980 DUKE L.J. 103, 103 (1980) as “noting that the ‘consensus’ is that agency lawmaking via
legislation is superior to adjudication.” Other articles she cites (not cited by Professor Grunewald)
criticizing agencies for not using more rulemaking include: Carl McFarland, Landis’ Report: The Voice
of One Crying in the Wilderness, 47 VA. L. REV. 373, 433-38 (1961) and Richard J. Pierce, Jr., Two
Problems in Administrative Law: Political Polarity on the District of Columbia Circuit and Judicial
Deterrence of Agency Rulemaking, 1988 DUKE L.J. 300, 308-09 (1988). Other articles with a more
ambivalent or more balanced view identified by Ms. Eyer include: E. Donald Elliott, Re-Inventing
Rulemaking, 41 DUKE L.J. 1490, 1491-92 (1992), Jeffrey J. Rachlinski, Rulemaking Versus Adjudication: A Psychological Perspective, 32 FLA. ST. U. L. REV. 529, 550-53 (2005); and Glen O. Robinson,
The Making of Administrative Policy: Another Look at Rulemaking and Adjudication and Administrative
Procedure Reform, 118 U. PA. L. REV. 485, 514-28 (1970).
25 Richard K. Berg, Re-examining Policy Procedures: The Choice Between Rulemaking and
Adjudication, 38 ADMIN. L. REV. 149, 163-64 (1986) (providing a list of advantages for agencies in
using of rulemaking instead of adjudication).
26 Id. at 162.
27 Id.
28 Id.
29 Id.
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4. Rulemaking’s procedures (at least as provided for in Section 553 of
the APA) provide more flexibility than the formal adjudication procedures mandated by Sections 554, 556, and 557. Specifically the agency has more control over presentation of information and may resort
to its staff expertise without worrying about the separation of functions requirements in Section 554.
5. Agencies can better control the scope and pace of rulemaking and
thereby maintain better control over its agenda.
6. A final rule issued after notice-and-comment rulemaking can
“thereafter be applied without re-examination to eliminate case-bycase adjudications.”
This last point is important in two ways. A rule properly issued in a
rulemaking proceeding allows agencies to limit or eliminate issues that
30
might otherwise require a hearing in an individual case. And it also produces a binding precedent in future cases, unlike a rule announced in an
adjudication which can be challenged in future enforcement actions by dif31
ferent parties. On the other hand, the agency is also bound and cannot
change a “rulemaking rule” in a future adjudication; it must change it in
32
another rulemaking proceeding. This aspect might have particular salience at the NLRB where shifting majorities often seek to change past adju33
dicative precedents. It may appeal to a Board that wishes to enshrine its
new policy in a way that is more difficult to change. On the other hand, the
Board has defended its reluctance to use rulemaking because the “cumbersome process of amending formal rules would impede the law’s ability to
34
respond quickly and accurately to changing industrial practices.”
30 See, e.g., Heckler v. Campbell, 461 U.S. 458 (1983); F.P.C. v. Texaco, Inc., 377 U.S. 33 (1964);
United States v. Storer Broadcasting Co., 351 U.S. 192 (1956); Am. Airlines, Inc. v. C.A.B., 359 F.2d
624, 633 (1966) (en banc).
31 Compare N.L.R.B. v. St. Francis Hosp., 601 F.2d 409 (9th Cir. 1979) (rule announced in an
adjudication is precedential but may be challenged in next case), with Nat’l Petroleum Refiners Ass’n v.
F.T.C., 482 F.2d 672, 690 (D.C. Cir 1973) (noting that one benefit of making policy via rulemaking was
that main issue in future enforcement actions would simply be whether defendant had violated the rule).
32 See Am. Fed’n of Gov’t Employees Local 3090 v. Fed. Labor Relations Auth., 777 F.2d 751,
759 (D.C. Cir.1985) (holding that an agency “seeking to repeal or modify a legislative rule promulgated
by means of notice and comment rulemaking is obligated to undertake similar procedures to accomplish
such modification or repeal. . . . [U]ntil it amends or repeals a valid legislative rule or regulation, an
agency is bound by such a rule or regulation.”).
33 See, e.g., Int’l Union v N.L.R.B., 802 F2d 969, 974 (7th Cir. 1986) (holding while Board is not
bound by stare decisis, it may “jettison its precedents only if it has ‘adequately explicated the basis of its
new interpretation’” (quoting NLRB v. J. Weingarten, Inc., 420 U.S. 251, 267, (1975)).
34 See Zebrak, supra note 9 at 129.
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The Potential of Rulemaking by the NLRB
417
Since Berg compiled his list, it is possible that the calculus has
35
changed as rulemaking itself has become more “ossified.” The multiplicity of statutorily and presidentially required analytical and procedural additions to rulemaking may have led agencies to move away from rulemaking
36
to adjudication. However, I know of no empirical or even anecdotal evidence to prove that this has happened. Moreover, policymaking by adjudication may also have become more problematic due to agency problems
with the system of administrative law judges (ALJs) that must normally be
used in formal adjudication. Agencies have “voted with their feet” by
choosing to employ more informal adjudicative procedures including “non37
ALJ adjudicators” through various means. More likely, the locus of agency policymaking has shifted away from notice-and-comment rulemaking to
informal “guidance,” that may fall within an exemption from the noticeand-comment procedures of the APA, but only if it is not binding or treated
38
as binding on the public.
It would be hard for this article to contribute anything new to the
excellent scholarship concerning the Board’s past stance on the choice of
rulemaking versus adjudication, or even on the general issues confronting
agencies in this regard. Rather, as part of this symposium, I will assume
that there is renewed interest in rulemaking at the Board and review the
situation as it presents itself today.
35 See Jeffrey S. Lubbers, The Transformation of the U.S. Rulemaking Process – For Better or
Worse, 34 OHIO N.U. L. REV. 469 (2008) (describing the reduction in proposed and final rules since
1980 and attributing it to the many additional requirements applicable to rulemaking found in other
statutes and executive orders). For the use of the term “ossify,” see, for example, Thomas O. McGarity,
Some Thoughts on “Deossifying” the Rulemaking Process, 41 DUKE L.J. 1385 (1992); Richard J.
Pierce, Jr., Seven Ways to Deossify Agency Rulemaking, 47 ADMIN. L. REV. 59 (1995).
36 One of the first to raise this possibility was then-Professor Antonin Scalia in 1981. See, Berg,
supra note 25, at 149 (citing Antonin Scalia, Back to Basics: Making Law Without Making Rules,
REGULATION, July/Aug. 1981, at 25) (noting Scalia’s “prophe[cy]” that agencies might “turn to adjudication” to avoid the “increasing procedural burdens on rulemaking”)).
37 See Jeffrey S. Lubbers, APA-Adjudication: Is the Quest for Uniformity Faltering?, 10 ADMIN.
L.J. AM. U. 65 (1996) (detailing the paucity of ALJs at many agencies).
38 See Gen. Elec. Co. v. EPA, 290 F.3d 377, 383 (D.C. Cir. 2002) (“Our cases . . . make clear that
an agency pronouncement will be considered binding as a practical matter if it either appears on its face
to be binding . . . or is applied by the agency in a way that indicates it is binding.”). For more on legal
limits on agency use of policy statements, see JEFFREY S. LUBBERS, A GUIDE TO FEDERAL AGENCY
RULEMAKING 94-105 (4th ed. 2006).
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III. NLRB’S MOST RECENT EXPERIENCES WITH RULEMAKING
A. Health Care Bargaining Unit Rulemaking Timeline
The Board’s successful health care rule was proposed on July 2,
39
1987, and public hearings were held in Washington, Chicago and San
Francisco on August 17-18, August 31-September 1, and September 14-16,
1987. During the hearings 144 witnesses testified and the Board received
40
41
315 written comments. It was re-proposed on September 1, 1988. The
42
final rule was issued on April 21, 1989. The district court enjoined the
43
44
rule on July 25, 1989, the court of appeals reversed on April 11, 1990,
45
and the Supreme Court affirmed on April 23, 1991. Thus, the rulemaking
itself took 1¾ years and the litigation took another two years. But this
timeline obviously should not be the norm. The Board’s voluntary use of
three sets of public hearings may have made sense due to the novelty and
complexity of this rulemaking, but it clearly added a lot of time to the process and would normally not be necessary.
As Professor Grunewald noted:
[A] portion of the two years was consumed with a procedure not required for notice and comment rulemaking – multi-location hearings
with an opportunity for a form of cross-examination. . . . Under the
circumstances of this rulemaking, particularly its novelty for the
Board, the hearings were probably a desirable choice. Certainly as a
legal matter, however, and perhaps as a practical matter, the hearings
were procedural overkill and the burdens created by the number and
structure of the hearings would have to be considered as part of the
46
overall cost-benefit evaluation of the rulemaking.
39 Collective Bargaining Units in the Health Care Industry, 52 Fed. Reg. 25,142 (proposed July 2,
1987) (to be codified at 29 C.F.R. pt. 103).
40 Grunewald, supra note 6, at 300-01.
41 Collective Bargaining Units in the Health Care Industry, 53 Fed. Reg. 33,900 (proposed Sept.
1, 1988) (to be codified at 29 C.F.R. pt. 103).
42 See Collective Bargaining Units in the Health Care Industry, 54 Fed. Reg. 16,336 (Apr. 21,
1989) (to be codified at 29 C.F.R. pt. 103).
43 Am. Hosp. Ass’n v. N.L.R.B., 131 L.R.R.M. (BNA) 2751 (N.D. Ill. May 22, 1989).
44 Am. Hosp. Ass’n v. N.L.R.B., 899 F.2d 651 (7th Cir. 1990).
45 Am. Hosp. Ass’n v. N.L.R.B., 499 U.S. 606 (1991).
46 Grunewald, supra note 6, at 319-20. The Administrative Conference echoed this view:
The Board should publish rulemaking procedures that conform to the informal rulemaking procedures of the Administrative Procedure Act. These procedures should not require oral hearings or
other procedures in addition to notice and the opportunity for comment, as a general matter, although such additional procedures may be useful for particular rulemakings.
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The Potential of Rulemaking by the NLRB
419
Nor would a second round of notice and comments normally be required. And Supreme Court review obviously will be a rare occurrence.
On the other hand, the number of written comments was quite low by
today’s standards, and, unless a judicial review provision is added to the
NLRA as recommended below, two rounds of judicial review would likely
be the norm in any controversial Board rulemaking.
B. Beck Rulemaking Timeline
The Beck case was decided June 29, 1988. The Board issued an
advance notice of proposed rulemaking on March 5, 1992, and a notice of
proposed rulemaking in September 22, 1992. It was withdrawn on March
47
19, 1996. In its explanation for the withdrawal, the Board said that it had
addressed many of the issues raised by the notice of proposed rulemaking in
several recent adjudications, and that other cases on its docket “will afford
the Board the opportunity to address many, if not all, of the remaining
issues that are addressed in the notice of proposed rulemaking. It is the
Board’s belief that those issues may now be more expeditiously resolved in
48
those cases than in the rulemaking proceeding.”
C. Single Location Bargaining Unit Rulemaking Timeline
The proposal concerning the appropriateness of single location bargaining units in certain industries was floated in an advance notice of proposed rulemaking on June 2, 1994, proposed on September 28, 1995, and
49
withdrawn on February 23, 1998. In its terse explanation the Board, with
one member dissenting, stated that it took this action because “no action has
Recommendations of the Administrative Conference Regarding Administrative Practice and Procedure:
Facilitating the Use of Rulemaking by the National Labor Relations Board (Recommendation 91-5), 56
Fed. Reg. 33,841, 33,852, ¶ 2(a) (July 24, 1991) (to be codified at 1 C.F.R. § 305.91-5), available at
http://www.law.fsu.edu/library/admin/acus/305915.html.
47 See Commc’n Workers v. Beck, 487 U.S. 735 (1988); Union Dues Regulations, 57 Fed. Reg.
43,635 (proposed Sept. 22, 1992) (to be codified at 29 C.F.R. pt. 103) (following 57 Fed. Reg. 7897
(proposed Mar. 5, 1992) (an earlier advance notice of proposed rulemaking)); Rules and Procedures for
the Implementation of Commc’n Workers v. Beck, 61 Fed. Reg. 11,167 (proposed Mar. 19, 1996) (to be
codified at 29 C.F.R. pt. 102); see also, Scott A. Zebrak, Comment, The Future of NLRB Rulemaking:
Analyzing the Mixed Signals Sent by the Implementation of the Health Care Bargaining Unit Rule and
by the Proposed Beck Union Dues Regulation, 8 ADMIN. L.J. AM. U. 125, 147-58 (1994) (analyzing the
Board’s rulemaking response to Beck prior to its subsequent withdrawal of the rule).
48 Rules and Procedures for the Implementation of Commc’n Workers v. Beck, 61 Fed. Reg.
11,167 (proposed Mar. 19, 1996) (to be codified at 29 C.F.R. pt. 102).
49 See Appropriateness of Requested Single Location Bargaining Units in Representation Cases,
59 Fed. Reg. 28,501 (proposed June 2, 1994) (to be codified at 29 C.F.R. pt. 103); Appropriateness of
Requested Single Location Bargaining Units in Representation Cases, 60 Fed. Reg. 50,146 (proposed
Sept. 28, 1995) (to be codified at 29 C.F.R. pt. 103); 63 Fed. Reg. 8890 (proposed Feb. 23, 1998) (to be
codified at 29 C.F.R. pt. 103).
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[5:411
been taken by the Board on [the] rulemaking proceeding for several years
and [because of] the Board’s determination to focus its time and resources
50
on reducing the backlog of adjudicated cases pending before the Board.”
It also dropped a footnote citing a congressional rider attached to each of
the NLRB’s 1996, 1997, and 1998 appropriations bills that prohibited the
agency from expending any funds to promulgate a final rule in that rule51
making proceeding.
IV. POTENTIAL OBSTACLES TO BOARD RULEMAKING TODAY
A. “Ossification” Concerns Should be Somewhat Less for the Board
The ossification concerns mentioned above that currently affect all
agency rulemaking may be less pronounced for an independent agency like
the Board. Several important statutes and almost all of the analytical and
procedural requirements found in Executive Orders and other presidential
directives are inapplicable to Board rulemaking. The primary statutes that
apply, other than the National Labor Relations Act (NLRA) and the Administrative Procedure Act, are the Paperwork Reduction Act (PRA), and the
Regulatory Flexibility Act (RFA) (along with its follow-up legislation the
Small Business Regulatory Enforcement Fairness Act). The National Environmental Policy Act (NEPA) also applies, but it is difficult to imagine how
a Board rule would be a “major Federal action[] significantly affecting the
52
quality of the human environment.”
1. Paperwork Reduction Act
The NLRB rarely has a problem with the PRA. In its occasional procedural rulemakings it has disclaimed any impositions of reporting or
recordkeeping requirements under the PRA. On occasion it has appropriately sought Office of Management and Budget (OMB) approval of a free53
standing form or other information collection request. While it is true that
a substantive rulemaking may contain a reporting requirement or other
information collection request, and that would bring the NLRB into the
orbit of OMB review, the Board, like all independent regulatory agencies
has the right under the Act to override a denial of approval by a majority
50
Withdrawal of Proposed Rulemakings, 63 Fed. Reg. 8890, 8891 (Feb. 23, 1998).
Id. at n.2.
52 42 U.S.C. § 4332 (2006).
53 See, e.g., Notice of Final Designation Procedures for Grantees, 68 Fed. Reg. 75,643, 75,652
(Dec. 31, 2003) (form for supplemental statement for application for professional position in the Office
of the General Counsel).
51
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54
vote of its members. Thus, the PRA should not pose much of an obstacle
to NLRB rulemaking.
2. Regulatory Flexibility Act
The Regulatory Flexibility Act requires agencies to consider the
impact of proposed rules on “small entities” – including “small businesses,”
“small (not-for-profit) organizations,” and “small governmental jurisdic55
tions.” The Act does not, however, mandate any particular outcome in
rulemaking. It only requires consideration of alternatives that are less burdensome to small entities and an agency explanation of why alternatives
56
were rejected.
In practice, the way this would work is that unless the Board certifies
to the Chief Counsel for Advocacy of the Small Business Administration,
and publishes such certification in the Federal Register, that the rule will
not have a “significant economic impact on a substantial number of small
57
entities,” the agency must prepare an “initial regulatory flexibility analysis” (IRFA). The IRFA, or a summary thereof, must be published in the
Federal Register along with the proposed rule. The IRFA or the certification must be sent to the Chief Counsel for Advocacy. Courts now regularly
58
review such certifications.
54
44 U.S.C. § 3507 (f) (2006).
5 U.S.C. § 601(3)-(5) (2006) (providing definitions of these terms, although they are openended in the sense that agencies can establish alternative definitions appropriate to their activities); see
also Dep’t. of Commerce, GUIDELINES FOR PROPER CONSIDERATION OF SMALL ENTITIES IN AGENCY
RULEMAKING, available at http://www.ogc.doc.gov/ogc/legreg/zregs/guidelines.htm (“A small business
is any business that meets the size standards set forth in part 121 of Title 13, Code of Federal Regulations (CFR). Part 121 sets forth, by the North American Industry Classification System (NACIS), the
maximum number of employees or maximum average annual receipts a business may have to be considered a small entity. Provision is made for an agency to develop industry-specific definitions. The
NACIS is available at http://www.sba.gov/size/sizetable2002.html. A small organization is any notfor-profit enterprise that is independently owned and operated and not dominant in its field. A small
government jurisdiction is any government or district with a population of less than 50,000.”).
56 5 U.S.C. § 603(a)(3)-(b)(3); see also 5 U.S.C. § 611(b) (noting that the agency’s explanation
will be part of the “whole record of action” if judicial review of a final rule is sought).
57 5 U.S.C. § 605(b) (2006).
58 For a case upholding the Agency’s certification, see Cement Kiln Recycling Co. v. EPA, 255
F.3d 855, 869 (D.C. Cir. 2001) (holding that under the RFA, an agency need not consider impacts on
small business indirectly affected by the regulation of other entities, and upholding EPA certification by
concluding that only six directly affected facilities met the definition of a “small business” and that only
two of these would experience compliance costs in excess of one percent of annual sales); but see N.C.
Fisheries Ass’n, Inc. v. Daley, 27 F. Supp. 2d 650, 659-60 (E.D. Va. 1998) (setting aside the annual
fishing quota rule where the Secretary “did not consider a community any smaller than the entire state of
North Carolina . . . ignored readily available data which would have shown the number of fishing vessels impacted by the agency’s regulations, . . . disregarded the simple distinction between a license
holder and a fisherman who actually fishes for flounder . . . [and] improperly maintained that any present economic loss are alleviated by past revenues earned by overfishing”); S. Offshore Fishing Ass’n v.
55
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When a rule will have a significant economic impact, the agency, in
addition to publishing the proposed rule and IRFA, or summary, in the
Federal Register, “shall assure that small entities have been given an opportunity to participate in the rulemaking for the rule through the reasonable
use of techniques” such as advance notice of proposed rulemaking, publication of notice in specialized publications, direct notification of small
entities, the holding of public conferences or hearings, or use of simplified
59
or modified procedures that make it easier for small entities to participate.
After the comment period on the proposed rule is closed, the agency must
either certify a lack of impact or prepare a “final regulatory flexibility analysis” (FRFA), which, among other things, responds to issues raised by pub60
lic comments on the IRFA. The agency is not required to send the FRFA
to the Chief Counsel for Advocacy, but it must make it available to the public on request and publish the analysis or a summary of it in the Federal
61
Register.
It is unclear how big of a burden this would be for the Board. It is
interesting to note that in the health care bargaining unit rule itself, the
Board issued a second notice of proposed rulemaking, in part to add a Reg62
ulatory Flexibility Act certification. It is certainly possible that a Board
rule might have a “significant economic impact on a substantial number of
small entities,” and if so the agency would need to do the requisite analysis.
63
This determination is subject to judicial review. However, the courts have
held that only “small entities directly regulated by the proposed [regulation]
– whose conduct is circumscribed or mandated – may bring a challenge to
the RFA analysis or certification of an agency. . . . However, when the regulation reaches small entities only indirectly, they do not have standing to
64
bring an RFA challenge.” This may mitigate the risk of a lawsuit against
the Board under the RFA.
Daley, 995 F. Supp. 1411, 1434-37 (M.D. Fla. 1998) (rejecting the Commerce Department’s certification
of no significant impact on shark fishermen of a fifty-percent quota cut, and granting summary judgment
under RFA); S. Offshore Fishing Ass’n v. Daley, 55 F. Supp. 2d 1336 (M.D. Fla. 1999) (granting an
injunction against the following year’s quota after remand).
59 5 U.S.C. § 609 (2006).
60 5 U.S.C. § 604(a); see also Grand Canyon Air Tour Co. v. FAA, 154 F.3d 455, 470-71 (D.C.
Cir. 1998) (accepting FAA’s responses to comments on IRFA).
61 5 U.S.C. § 604(b).
62 See Collective-Bargaining Units in the Health Care Industry, 53 Fed. Reg. 33,900, 33,934
(Sept. 1, 1988) (to be codified at 29 C.F.R. pt. 103); Grunewald, supra note 6, at 304 (suggesting that
the “desire to correct [the omission of the certification] might, in part have motivated an additional
comment period”). See also the recent “clarification” by the National Mediation Board to a proposed
rule adding such a formal certification, 74 Fed. Reg. 64,695 (Dec. 4, 2009).
63 5 U.S.C. § 611 (2006).
64 White Eagle Co-op. Ass’n v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).
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A quirk in the NLRA might also have an effect on the Board’s performance of its duties under the RFA. Section 4 of the NLRA, 29 U.S.C. §
65
154, appears to bar the Board from hiring economists.” This provision
66
67
was added in the Taft Hartley Act, but the legislative history is sparse. In
the Senate’s debate over whether to override President Roosevelt’s veto,
Senator Kilgore (D-WV) criticized the provision:
[S]uch experts are necessary to study industrial relations, to study
company statistical records, to help compute back-pay obligations of
companies, to provide the necessary advice for the Board to determine
what is and what is not fail in the way of wages. But they are forbidden to hire such men. Whom are they going to get? Will the Board
proceed along the line of intelligent guesses we hear so much about?
How a Government agency concerned week in and week out with
problems arising out of economic conditions can function without the
help of economists is a question I cannot answer. I would as soon operate a mine without a mining-engineer as to try to establish a wage
scale without an economic staff who can study the economics of the
68
situation.
Senator Ferguson (R-MI), in responding to Senator Kilgore, seemed to
be concerned that without the provision, “this administrative board [could]
go outside the record, build up its own record unbeknown to the union or
the company, and make a decision based on what it may find from the
69
opinion of its own economists outside the record.”
But regardless of the motives of the drafters, this provision hardly
squares with recent congressional moves to increase the use of cost-benefit
analysis in regulation, and I suspect that the Board would have very little
difficulty in obtaining congressional acquiescence in removing this provision. If it is not removed, however, it would be hard to fault the Board for
not performing adequate economic analysis under the RFA or any other
statutory or executive mandate.
65 “Nothing in this subchapter shall be construed to authorize the Board to appoint individuals for
the purpose of conciliation or mediation, or for economic analysis.” 29 U.S.C. § 154 (2006).
66 Taft Hartley Act, Pub. L. No. 80-101, 61 Stat. 136 (1947).
67 The Senate Report on the Taft-Hartley Act indicates that the words “or for economic analysis”
were substituted in section 4(a) for “(or for statistical work, where such service may be obtained from
the Department of Labor)”. The conference report on section 4, which added this language, did not even
refer to it. See H.R. REP. NO. 510, at 37-38 (1947) (Conf. Rep.).
68 93 CONG. REC. 7418 (1947).
69 93 CONG. REC. 7419 (1947).
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3. Congressional Review Act
The Small Business Regulatory Enforcement Fairness Act of 1996
added a new chapter to Title 5 of the United States Code, establishing a
70
requirement for congressional review of agency rules. This title became
commonly known as the Congressional Review Act (CRA). Under this
process, all federal agencies, including independent regulatory agencies, are
required to submit each “rule” to both houses of Congress and to the
Government Accountability Office (GAO) before it can take effect.
The definition of “rule” in the CRA is similar to the basic APA defini71
tion in 5 U.S.C. § 551(4) but with fewer exceptions. For each such rule,
agencies must submit to Congress: (1) a report containing “a concise
general statement relating to the rule” and the rule’s proposed effective
date; and (2) a copy of any special analysis or statement required by statute
72
or relevant executive orders. “Major” rules (i.e., rules with an impact
exceeding $100 million on the economy) are subject to a sixty-day delay in
73
74
their effective date while they are reviewed by Congress. Non-major
70 Small Business Regulatory Fairness Act of 1996, Pub. L. No. 104-121, tit. II, subtitle E, 110
Stat. 856 (codified at 5 U.S.C. §§ 801-808 (2006)). See Daniel Cohen & Peter L. Strauss, Congressional Review of Agency Regulations, 49 ADMIN. L. REV. 95 (1997); see also CONGRESSIONAL RESEARCH
SERVICE, DISAPPROVAL OF REGULATIONS BY CONGRESS: PROCEDURE UNDER THE CONGRESSIONAL
REVIEW ACT (Oct. 10, 2001) (Richard S. Beth, primary author), available at
http://www.senate.gov/reference/resources/pdf/RL31160.pdf.
71 5 U.S.C. § 804 (2006). The following types of rules are exempted from congressional review:
(1) rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules
of agency organization, procedure, or practice that do not substantially affect the rights or obligations of
nonagency parties. Id. § 804(3). Certain rules of the Federal Reserve Board are also exempted. Id. §
807.
72 5 U.S.C. § 801(a).
73 A major rule takes effect, unless disapproved, on the latest of three possible dates: (1) sixty
calendar days after Congress receives the report or the rule is published in the Federal Register; (2)
where Congress has passed a joint resolution of disapproval of the rule, subsequently vetoed by the
President, 30 session days after Congress receives the veto, or if earlier, the date on which either House
of Congress votes and fails to override the veto; or (3) the date on which the rule would otherwise go
into effect, if not for this review requirement. Id. § 801(a)(3). If either House votes to reject a joint
resolution of disapproval, the rule goes into effect at that time. Id. § 801(a)(5).
Note that supporters of a popular rule can engineer such a vote early in the 60-day period to hasten
the rule’s effective date. See, e.g., S.J. Res. 60, 104th Cong. (1996) (disapproving Medicare rule) (rejected).
74 More specifically, the Court of Appeals for the Federal Circuit has held that the CRA does not
alter major rules’ effective dates, but simply suspends their operation pending the outcome of Congressional review. There are also exceptions to the delayed effective date provision. Major rules relating to
hunting, fishing, and camping can be made effective immediately. 5 U.S.C. § 808(1). There is also a
“good cause” exception in § 808(2), similar to that in 5 U.S.C. § 553(b). Finally, the President may
personally make a rule immediately effective by issuing an Executive Order that the rule is necessary
due to an imminent threat to health, safety, or other emergency; necessary for the enforcement of criminal laws; necessary for national security; or issued pursuant to any statute implementing an international
trade agreement. 5 U.S.C. § 801(c)(2).
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rules can go into effect without delay, although Congress may, of course,
still review them.
The CRA’s main purpose is to provide Congress with an expedited
method of disapproving agency rules. To be constitutional, however, it
requires passage by both houses of a joint resolution of disapproval and
75
presentation to the President for signature.
76
While a large number of rules are sent to Congress each week, the
impact of the CRA on the rulemaking process has been slight. Obviously, it
gives interested parties another “bite at the apple” after the agency’s process
is complete. It also gives Congress another weapon in its oversight arsenal.
But so far, only one rule has been disapproved and few resolutions of dis77
approval have even been introduced. The disapproval occurred in March
2001 when the Congressional leadership, supported by the Bush Administration, successfully used the Congressional Review Act to overturn the
78
Clinton Administration’s OSHA’s controversial ergonomic regulations.
Even though a similar scenario unfolded in 2009, the Congress and
Obama Administration did not make use of the CRA to overturn Bush
Administration rules. Thus the law appears to be more of an annoyance for
the agencies than a useful tool for Congress. Nevertheless, it has created
new responsibilities for agencies and Congress, new waiting periods, and
new pressure points in the process. Moreover, it has created new tracking
79
responsibilities for the agencies.
75 See INS v. Chadha, 462 U.S. 919, 945-46 (1983) (setting forth the Constitution’s Bicameral
and Presentment Clauses, art. I, § 7, cls. 2-3).
76 As of March 31, 2008, the Comptroller General had submitted reports on 731 major rules under
§ 801(a)(2)(A) and GAO had cataloged the submission of 47,540 non-major rules as required by §
801(a)(1)(A). CONGRESSIONAL RESEARCH SERVICE, CONGRESSIONAL REVIEW OF AGENCY
RULEMAKING: AN UPDATE AND ASSESSMENT AFTER A DECADE, at 6 (May 8, 2008) (Morton Rosenberg,
primary author), available at http://www.fas.org/sgp/crs/misc/RL30116.pdf.
77 Rosenberg reports that forty-seven resolutions have been introduced through March 2008; only
five received any sort of a floor vote. Id. at 7-14, tbl. 1.
78 The ergonomics regulations issued after ten years of development by OSHA addressed the
concerns that surround repetitive lifting and motions in the workplace. These regulations would have
mandated standards for employers to promote ergonomics, buy specific equipment and reduce workplace injuries. See Ergonomics Program, 66 Fed. Reg. 20,403 (Apr. 23, 2001) (providing official notice
of withdrawal of the regulation).
79 See Oversight Hearings on the Congressional Review Act Before the House Subcomm. on
Commercial and Administrative Law of the Comm. on the Judiciary, 104th Cong. 68-70 (1997) (statement of Jon Cannon, General Counsel, Environmental Protection Agency) (describing the centralization
of the submittal and tracking function at EPA and the need for a daily messenger to deliver rules to three
required offices); id. at 70-74 (statement of Nancy McFadden, General Counsel, Department of Transportation) (describing the computer tracking system and messenger system used by the Department).
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4. Executive Orders
There are numerous Executive Orders and other presidential or OMB
documents that contain procedural or analytical requirements applicable to
80
rulemaking by executive branch agencies.
81
The key to such directive is Executive Order 12,866, which mandates
that executive agencies submit all of their “significant” proposed and final
rules to the Office of Information and Regulatory (OIRA) for review and
clearance. Another key feature is that “economically significant” rules with
an impact of over $100 million on the economy must be accompanied by a
cost-benefit analysis. This Order was issued by President Clinton in 1993,
survived the Bush Administration, and is still in effect at this writing, pend82
ing a well-publicized review by the Obama Administration.
The good news for the NLRB is that few of these executive orders and
White House directives have been made applicable to the independent regu83
latory agencies. Although some scholars (including one who is now the
present occupant of the key position of Administrator of OIRA), have advocated extending the White House rulemaking review executive order to
84
independent agencies, no President has attempted to do so – with the one
limited attempt by President Clinton that is explained below. One reason
may be that members of independent agencies do not serve at the pleasure
of the President so White House leverage over an independent agency that
failed to follow an executive order is more limited. Therefore, NLRB rules
are not subject to OMB review – a process that typically adds about six
months to the rulemaking process because, under the executive order, OIRA
has 90 days to review the submission at both the proposed and final stages.
The two aspects of Executive Order 12,866 that President Clinton did
direct to all agencies (including the independent agencies) were to: (1) participate in the Unified Agenda of Federal Regulatory and Deregulatory
80 See Lubbers, supra note 38, at 147-95; DEPARTMENT OF TRANSPORTATION, RULEMAKING
REQUIREMENTS (2009) (prepared by Neil Eisner), available at http://regs.dot.gov/
rulemakingrequirements.htm.
81 Exec. Order No. 12,866 § 3(f), 58 Fed. Reg. 51,735 (Oct. 4, 1993).
82 Obama request for comments. Obama did revoke two relatively minor Bush amendments to
E.O. 12,866. Exec. Order No. 13,497, 74 Fed. Reg. 6113 (Feb. 4, 2009).
83 The only statutory definition of “independent regulatory agencies” is found in the Paperwork
Reduction Act, Pub. L. No. 96-511, 94 Stat. 2812 (1980) (codified at 44 U.S.C. §3501); see also Marshall J. Breger & Gary J. Edles, Established by Practice: The Theory and Operation of Independent
Federal Agencies, 52 ADMIN. L. REV. 1111 (2000).
84 See Peter L. Strauss & Cass R. Sunstein, The Role of the President and OMB in Informal
Rulemaking, 38 ADMIN. L. REV. 181, 203 (1986). Professor Sunstein is now the OIRA Administrator.
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85
Actions by publishing information on all regulations under development
or review; and (2) develop an annual “Regulatory Plan” to be forwarded to
OIRA by June of each year for review by the OMB Director and other
86
“Advisors.” The order also requires that the plan include the agency’s
87
plans to review existing regulations.
Many independent agencies do comply with this presidential directive/request, and the NLRB would have to decide whether to do so –
though it is not a particularly burdensome task.
B. Judicial Review Concerns
Unlike the NLRA, statutes containing judicial review provisions applicable to rulemaking generally call for direct, pre-enforcement review in the
courts of appeals. Most of the major rulemaking programs are covered by
such a provision, and statutes establishing the programs normally contain
requirements as to venue, timing of review, and scope of review.
The Administrative Conference recommended placing direct review of
rules in the courts of appeals in instances where: (1) the rule is so significant that a district court decision would likely be appealed; and (2) where
other “orders” of agencies are already reviewed that way. The complete
Conference statement on the subject is as follows:
The appropriate forum for the review of rules promulgated pursuant to
the notice-and-comment procedures of 5 U.S.C. 553 should be determined in the light of the following considerations:
(a) Absence of a formal administrative record based on a trial-type
hearing does not preclude direct review of rules by courts of appeals
because: (i) Compliance with procedural requirements of 5 U.S.C.
553, including the requirement of a statement of reasons for the rule,
will ordinarily produce a record adequate to the purpose of judicial
review, and (ii) the administrative record can usually be supplemented, if necessary, by means other than an evidentiary trial in a district
court.
(b) Direct review by a court of appeals is appropriate whenever: (i) An
initial district court decision respecting the validity of a rule will ordi85 The title was changed to add “Deregulatory” in 1996. For online versions of the Agenda from
1995 to the present, see Office of Information and Regulatory Affairs, http://www.reginfo.gov/public/
(then follow “Unified Agenda” hyperlink(s)) (last visited July 19, 2010).
86 Exec. Order No. 12,866 § 4(c), 58 Fed. Reg. 51,735 (Sept. 30, 1993). The “Advisors” are top
regulatory policy officials of the Administration. Id. § 3(a). The plan is published each year in the
October Unified Agenda.
87 Id. § 5.
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narily be appealed or (ii) the public interest requires prompt, authoritative determination of the validity of the rule.
(c) Rules issued by agencies that regularly engage in formal adjudication and whose “orders” are subject by statute to direct review by the
courts of appeals will normally satisfy the criteria of (b) above and in
any event should be reviewable directly by the court of appeals.
(d) Rules of other agencies that do not satisfy the criteria of (b) above
should generally be reviewable in the first instance by the district
88
courts.
NLRB rulemaking surely meets the criteria set forth above for judicial
review in the courts of appeals. Amending the NLRA in this regard is important in order to avoid district court forum shopping and two-level review
in challenges to virtually all significant Board rules. Moreover, since Board
adjudicative orders are already reviewable directly in the courts of appeals,
those courts are familiar with the Board’s authority. Professor Grunewald
recognized how important this point is for the future of NLRB rulemaking:
The most formal of these steps [to enhance the prospects for further
rulemaking] would be to amend the NLRA to provide specifically for
preenforcement judicial review of a final Board rule. This would confine review to a single proceeding, thus avoiding the confusion and
inefficiency of serial challenges to a rule. The simplest and most
traditional provision along this line would authorize an exclusive proceeding in any one of the courts of appeals. Consistent with wellrecognized needs for prompt and comprehensive review when rules
having broad national impact are challenged, the provision should also
impose a time limit on seeking preenforcement review, and should
preclude review in enforcement proceedings of questions of (1)
whether the rule was within the authority of the Board, (2) whether
procedural requirements for the rulemaking were satisfied, and (3)
whether there was adequate support for the rule in the rulemaking
89
record.
The Administrative Conference agreed and so recommended:
Congress should amend the National Labor Relations Act to confine
preenforcement review of final Board rules to a single proceeding.
Review should be authorized in the appropriate court of appeals. This
88 ACUS Recommendation: The Choice of Forum for Judicial Review of Administrative Action
(Recommendation 75-3), 40 Fed. Reg. 27,926 (July 2, 1975).
89 Grunewald, supra note 6, at 321.
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authorization should include a reasonable time limit on the seeking of
preenforcement review and preclude judicial review of rules at the
enforcement state concerning issues relating to whether (a) the procedures employed in the rulemaking were adequate, or (b) there was
90
adequate support for the rule in the administrative record.
C. Need for the Board to Equip Itself to Undertake More Rulemakings
If the Board does decide to undertake more rulemaking, it needs to
have the wherewithal to do so. As Grunewald, suggested:
[F]urther use of rulemaking would be a more realistic prospect for the
Board, as an institutional matter, if there were a staff that could be
called upon to provide support regardless of the particular subject of
the rulemaking. Such a staff not only might provide support in
ongoing proceedings, but also might be a source of substantive and
91
procedural expertise in considering future rulemakings.
The Board would also have to jump aboard the current transition into
the world of “e-rulemaking,” by participating in the new government-wide
92
rulemaking portal, Regulations.gov, and in the unified docketing system,
93
the Federal Docket Management System.
Grunewald also recognized the need for a “regularized method for
94
identifying manageable and timely subjects for possible rulemaking.”
This idea was fleshed out by the Administrative Conference as follows:
(b) Identification of Subjects for Rulemaking
To assist the Board in identifying manageable and timely subjects for
which rulemaking might be appropriate, it should consider, among
others, the following factors:
(i) The need for submissions and information, including empirical
data, beyond that normally available through adjudication.
(ii) The value of participation by affected persons beyond the parties
likely to participate in adjudication, with particular attention to possible reliance on prior policy and the breadth of impact of a new policy.
90 ACUS Recommendation: Facilitating the Use of Rulemaking by the National Labor Relations
Board (Recommendation 91-5), 56 Fed. Reg. 33,852 ¶ 3 (July 24, 1991).
91 Grunewald, supra note 6, at 322.
92 Regulations.gov, http://www.regulations.gov (last visited July 19, 2010).
93 Federal
Docket Management System, https://fdms.erulemaking.net/fdms-web-agency/
component/submitterInfoCoverPage?Call.
94 Grunewald, supra note 6, at 322.
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(iii) The need to establish policy promptly in new areas of responsibility or for new enforcement initiatives.
(iv) The opportunity for stabilizing policy in the particular subject
area.
(v) The likelihood that future litigation and enforcement costs may be
lessened if a readily applicable rule is developed.
(vi) The need to achieve control over the subject and timing of policy
95
review and development.
D. Integrating Rulemaking with Pending Adjudications
Because a Board rulemaking is likely to relate to issues involved in
pending cases, it will need to consider how to handle this potential problem.
The ACUS recommendation suggests:
The Board should develop a policy to govern situations in which the
subject of a proposed rule has already been the focus of consideration
in prior adjudicatory proceedings. The Board should seek to anticipate enforcement issues that may arise during the pendency of the
rulemaking and possible judicial review. During the pendency of a
rulemaking, the Board and its independent General Counsel ordinarily
should continue to act under its body of precedent, but they should be
prepared to depart from precedent in individual cases where the appli96
cation of such precedent would be unfair or inefficient.
Grunewald puts a finer point on this issue by raising the issue of what
the Board should do, if, as happened in the health care bargaining unit rule,
a court enjoins the rule pending judicial review. This issue would hopefully
not arise if the NLRA were amended to place judicial review directly in the
courts of appeals. And it may be that the Board will continue to eschew
rulemaking absent such an amendment. But if not, Grunewald suggests
that:
Given its broad enforcement responsibilities, the Board should ordinarily continue to apply existing law during the pendency of a rulemaking as it did with health care unit determinations. Yet once a rule
is promulgated, even though it may become the subject of judicial
review, the Board should ordinarily apply the law expressed in the rule
95
96
ACUS Recommendation, supra note 90.
Id. ¶ 2(c).
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as promulgated-unless a court order issued in the course of the review
97
proceeding would preclude that action.
V. THE EXAMPLE OF THE RECENT NATIONAL MEDIATION BOARD
RULEMAKING
In what might be regarded as a “dress rehearsal” for future NLRB
rulemaking, the Board’s sister agency, the National Mediation Board
(NMB), has just completed its first significant rulemaking in many years.
The NMB, which resolves representation disputes concerning employees
covered by the Railway Labor Act (RLA), (concerning primarily rail and
airline employees), proposed a change in its longstanding way of ascertaining how to determine support for a collective bargaining representative after
98
an election. Prior to this rulemaking, the NMB’s “policy require[d] that a
majority of eligible voters in the craft or class must cast valid ballots in
99
favor of representation.”
On November 3, 2009, the NMB proposed
changing that policy to “allow the Board to certify as collective bargaining
representative any organization which receives a majority of votes cast in
100
an election.” In part the NMB relied on the fact that the relevant provisions of the RLA and NLRA are similar and that the NLRB certifies collective bargaining representatives “on the basis of the majority of ballots
101
cast.”
This rulemaking proved to be controversial. Both the proposed rule
and the final rule were issued over the published dissent of the NMB
102
Chairman. The NMB (like the NLRB in the health care bargaining unit
97
Grunewald, supra note 6, at 323.
Proposed Rules National Mediation Board: Representation Election Procedure, 74 Fed. Reg.
56,750 (Nov. 3, 2009) (to be codified at 29 CFR pts. 1202, 1206). The final rule was published
(adopting the proposed rule) on May 11, 2010, 75 Fed. Reg. 26,062. The rule was subsequently upheld
by the federal district court in Air Transport Ass’n. of America, Inc. v. National Mediation Bd., 719 F.
Supp. 2d 26 (D.C. Cir. 2010). The author served as a consultant to provide training to the NMB members on rulemaking generally and to provide advice to the NMB General Counsel on this rulemaking,
but all information provided here is from the public record.
99 Id. at 56,751.
100 Id.
101 Id.
102 See dissent of NMB Chairman Elizabeth Dougherty, 74 Fed. Reg. at 56,752-54 (proposed rule),
and 75 Fed. Reg. 26,083-88 (final rule). I would point out that the APA does not address the possibility
of dissents in agency rulemakings, and agencies seem to have widely different practices in this regard.
See, e.g., proposed rules by: Railroad Retirement Board, 60 Fed. Reg. 67,108, 67,109 (Dec. 28, 1995)
(paraphrasing the dissenting views of the Labor Member of the Board); Nuclear Regulatory Commission, 49 Fed. Reg. 31,700 (Aug. 8, 1984) (to be codified at 10 C.F.R. pt. 55) (including separate Views
of Commissioner); Federal Communications Commission, 75 F.C.C.2d 138, (1979) (including various
Commissioners’ concurring and dissenting statements). See also final rules by: Federal Energy Regulatory Commission, 72 Fed. Reg. 39,904 (July 20, 2007) (to be codified at 18 C.F.R. pt. 35) (including
98
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rule) decided it would be prudent to hold a public hearing on this
103
104
proposal. It heard thirty-one witnesses and also received nearly 24,962
105
comments during its sixty-day comment period.
The NMB issued its final rule, adopting the proposed rule without
change, on May 11, 2010 – just over five months after publishing its
106
proposal.
This was a rather remarkably expeditious rulemaking, considering that the Board and its small staff had little experience with rulemaking, held a public hearing, received almost 25,000 comments, ruled on
107
motions to disqualify the two members voting for the rule, and published
a twenty-page preamble in the Federal Register primarily responding to
comments.
Despite the claims of lack of statutory support, inadequate factual support, procedural failings, and bias raised in comments by opponents of the
rule and in the dissenting statement, a subsequent court challenge to the
108
NMB rule failed in federal district court. Of course there is still a possibility of an appeal to the D.C. Circuit, so the litigation may not be over, but
Commissioner’s partial dissent as attachment); Consumer Product Safety Commission, 71 Fed. Reg.
42,028 (July 25, 2006) (to be codified at 16 C.F.R. pt. 1115) (explaining that the Commission voted 2-1
to issue the rule, with the dissenting Commissioner’s statement and separate statements from the two
Commissioners in the majority available from the Office of the Secretary or on the Commission’s website); Railroad Retirement Board, 67 Fed. Reg. 5723 (Feb. 7, 2002) (to be codified at 20 C.F.R. pt. 200)
(adopting a final rule “by the majority of the Board, Management Member dissenting”); Federal Communications Commission, 50 Fed. Reg. 11,188 (Mar. 20, 1985) (to be codified at 47 C.F.R. pt. 73)
(correcting final rule and including a Commissioner’s dissenting statement, inadvertently omitted in the
original).
The NMB’s proposed rule included disclaimers that the rule would not have any triggering impacts
under the Paperwork Reduction Act, Regulatory Flexibility Act or National Environmental Policy Act.
The agency later published a clarification containing a similar formal certification under the Regulatory
Flexibility Act. Proposed Rules National Mediation Board: Representation Election Procedure, 74 Fed.
Reg. at 56,754.
103 Proposed Rules National Mediation Board: Representation Election Procedure, 74 Fed. Reg.
57,427 (Nov. 6, 2009) (to be codified at 29 C.F.R. pts. 1202, 1206). The one-day hearing was held on
December 7, 2009 at a hearing room in the National Labor Relations Board, which also provided the
security for the meeting.
104 See Rules and Regulations National Mediation Board: Representation Election Procedure, 75
Fed. Reg. 26,062, 26,063 (May 11, 2010) (to be codified at 29 CFR pts. 1202, 1206). The list of witnesses is available on the NMB’s website. NMB Open Meeting Speakers List, http://www.nmb.gov
/representation/proposed-rulemaking/speakers-list_12-07-09.html (last visited July 19, 2010).
105 See Rules and Regulations National Mediation Board: Representation Election Procedure, 75
Fed. Reg. at 26,063. Over 22,000 were form letters. See Proposed NMB Representation Rulemaking,
http://www.nmb.gov/representation/
proposed-rep-rulemaking.html (last visited July 19, 2010).
106 Rules and Regulations National Mediation Board: Representation Election Procedure, 75 Fed.
Reg. at 26,062.
107 The denial of the motions was included in the preamble. Id. at 26,063-66.
108 Air Transport Ass’n. of America, Inc. v. National Mediation Bd., 719 F. Supp. 2d 26 (D.C. Cir.
2010).
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The Potential of Rulemaking by the NLRB
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the NMB has at least shown that labor-related rulemaking can be undertaken efficiently and expeditiously.
VI. POSSIBLE EXAMPLES OF FUTURE BOARD RULEMAKINGS
It is undoubtedly presumptuous for me to suggest specific rulemaking
projects for the NLRB; even raising them brings to mind the proverbial
“briar patch.” However, I do have some very tentative ideas on the subject.
For starters, it might be best to consider such initiatives in areas where the
subject area of the potential rulemaking has been a subject of frequent
recent litigation and requires some rationalization.
One such example is in the compliance area. After the Board has
determined that an employer or union has committed an unfair labor practice, the next stage in the proceeding is compliance. Compliance involves
the Board securing the steps required to remedy the unfair labor practices
determined to have been committed. A common aspect of compliance is
the duty of employers guilty of a discriminatory discharge to compensate
employees with backpay subject to the concurrent duty of employees to
mitigate wage loss by reasonably looking for interim work. An aspect of
this that has seen a spate of litigation concerns who has the burden of proof
109
as to whether there has been a reasonable search for interim employment,
110
and, relatedly, how soon the employee has to begin looking for it, and
111
whether strike benefits can be treated as interim earnings.
These issues
would seem to lend themselves to the sort of collection of views and data
that would be facilitated by a rulemaking proceeding.
A similar area of uncertainty is the complicated question of whether
“employee involvement committees” are “labor organizations” under
112
section 2(5) of the NLRA, including the issues raised by the somewhat
113
114
conflicting decisions of Electromation, Inc. and Crown Cork & Seal.
109 See St. George Warehouse, 351 N.L.R.B. 961 (2007) (Board reverses prior law by placing
burden on the employee to show reasonable search, though employer keeps burden of showing there
were substantially equivalent job in the geographic area).
110 See Grosvenor Resort, 350 N.L.R.B. 1197 (2007) (delay of four to eight weeks too long; backpay denied).
111 See Domsey Trading Corp., 351 N.L.R.B. 824 (2007) (petition for enforcement denied in
N.L.R.B. v. Domsey Trading Corp., 383 Fed.Appx. 46, 188 L.R.R.M. (BNA) 3023 (2nd Cir. Jun 30,
2010)).
112 National Labor Relations Act § 8(a)(2), 29 U.S.C. § 158(a)(2) (2006) (stating that such labor
organization may not be “dominated” by employers under the NLRA).
113 Electromation, Inc., 309 N.L.R.B. 990 (1992) enforced, Electromation, Inc. v. N.L.R.B., 35
F.3d 1148 (7th Cir. 1994) (holding that employer “action committees” made up of management and
employee representative s on various workplace issues were labor organizations, partly because they
“dealt with” management; the court also held that the action committees were “dominated” by management).
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A second consideration pointing to the use of rulemaking is the
existence of outmoded standards developed in past adjudications, resulting,
for example, from economic inflation or changes in technology.
Several examples of inflation-eroded standards are presented by the
Board’s discretionary monetary jurisdictional standards. For example, the
jurisdictional standard for nonretail enterprises, set in a 1959 Board deci115
sion, is $50,000 in annual direct or indirect outflow or inflow. In 2009
116
dollars that amount would be nearly $364,000.
The jurisdictional
117
standard for retail concerns, based on a 1975 decision, is $500,000 in
annual gross volume of business – nearly $2,000,000 in 2009 dollars. I am
not suggesting that these higher amounts are the right levels for Board
jurisdiction – merely that a rulemaking might be a way to revisit and update
the various aspects of the Board jurisdictional lines, most of which were
118
decided long ago via case-by-case adjudication.
New technology has provided opportunities for Board rulemaking in
119
the election procedure area. In the 1966 Excelsior Underwear case the
Board established a requirement that in all election cases, the employer
must turn over to the Board the names and addresses of all the eligible
voters within seven days after the election has been agreed to or directed.
120
The Board then turns this information to all parties in the case. Another
Board requirement is that the election cannot take place for ten days to give
121
the union a chance to use this information. The advent of electronic technology would allow some significant adjustment in these deadlines. First, it
should be easier for the employer to compile, maintain and submit this
information. Seven days may have been necessary in the age of paper
114 Crown Cork & Seal Co. Inc., 334 N.L.R.B. 699 (2001) (holding that employee committees
given delegated authority to operate the plant, subject to managerial oversight were not labor organizations because they did not “deal with management”).
115 48 Am. Jur. 2d Labor and Labor Relations § 624 (2010) (citing Siemons Mailing Serv., 122
N.L.R.B. 81 (1958) decision supplemented on other grounds, 124 N.L.R.B 594 (1959)).
116 See The Inflation Calculator, http://westegg.com/inflation (last visited July 19, 2010).
117 48 Am. Jur. 2d Labor and Labor Relations § 625 (2010) (citing Dilene Answering Serv. Inc.,
216 N.L.R.B. 669 (1975).
118 See Colleges and Universities, 29 C.F.R. § 103.1 (2009) (According to the final rule preamble,
the proposed rule received thirty-three comments); Symphony Orchestras, 29 C.F.R. § 103.2 (2009)
(According to the final rule preamble, the proposed rule received twenty-six comments); Horseracing
and Dogracing Industries, 29 C.F.R. § 103.3 (2009) (announcing that the Board would not assert jurisdiction in any proceeding under sections 8-10 of the NLRA involving these industries).
119 Excelsior Underwear, Inc., 156 N.L.R.B. 1236 (1966).
120 Id. at 1239-40.
121 See NLRB, CASEHANDLING MANUAL FOR REPRESENTATION PROCEEDINGS § 11302.1, available at http://www.nlrb.gov/nlrb/legal/manuals/CHMII/Sections11300-11350.pdf; see also § 11312.1
(providing that, with some exceptions, an election may not be held sooner than 10 days after the list of
names and addresses of the eligible voters is due to be received by the Regional Director).
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The Potential of Rulemaking by the NLRB
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records and postal delivery, but two or three days should suffice now.
Secondly, the disclosure requirement might be updated to include
employees’ email addresses and/or cell phone numbers. Moreover, the
Board should now be able to transmit the information electronically to the
union; that in itself might allow a shorter period before the election.
Finally, since the waiting period is supposed to protect the union, perhaps
the union should be allowed to waive it. All of these steps to shorten the
election period could well be considered in a rulemaking.
Similarly, the exclusive union hiring hall, used frequently in the construction industry and at ports around the country, is a possible topic for
122
rulemaking.
There are many rules governing illegal discrimination
against non-union members or among union members in such halls which
123
can amount to a breach of the duty of fair representation.
Moreover, it
can be a violation of the NLRA if a hall is operated in an arbitrary and
124
One example might be that the rules of the hiring hall
capricious way.
may not be noticed or posted properly. A rulemaking proceeding could help
rationalize the adjudicative decisions in this area and even perhaps take
advantage of new technology in modernizing hiring hall requirements.
These examples are intended to be illustrative. To the extent they
seem unrealistic to labor law practitioners, I apologize, and invite them to
suggest their own nominations. But I cannot believe that in the large body
of NLRB case law there are not numerous opportunities for policymaking
by rulemaking.
VII. CONCLUSION
The NLRB should reconsider its long-standing antipathy toward rulemaking. Its legal authority to make rules has been ratified by a unanimous
Supreme Court decision. As an independent agency it has more freedom
and should be able to move more expeditiously than other executive
agencies. Its rules are not subject to OMB review (other than under the
Paperwork Reduction Act) and several other statutory and presidential directives are not applicable to it.
122 See generally Stagehands Referral Serv., LLC, 347 N.L.R.B. 1167, 1170-71 (2006) (providing
information on the operation of a hiring hall).
123 See, e.g., Plumbers and Pipe Fitters Local Union No. 32 v. N.L.R.B., 50 F.3d 29 (D.C. Cir.
1995).
124 A union commits an unfair labor practice if it administers an exclusive hiring hall arbitrarily or
without reference to objective criteria, even absent a showing of animus against nonmembers. Boilermakers Local 374 v. N.L.R.B., 852 F.2d 1353, 1358 (D.C. Cir. 1988); Stone & Webster Eng’g Corp.,
319 N.L.R.B. 609 (1995); but see Jacoby v N.L.R.B., 325 F.3d 301 (D.C. Cir. 2003); Contra Coastal
Elec., Inc., 329 N.L.R.B. 688 (1999) (holding mere negligence in the operation of an exclusive hiring
hall does not constitute a violation of the Act).
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However, its organic statute, the NLRA, needs several fixes for the
Board to proceed confidently with rulemaking. A judicial review provision
for direct judicial review of rules in the courts of appeals needs to be added,
along with a time limit for bringing certain types of challenges.
Additionally, the NLRA’s apparent prohibition on the Board’s employment
of economists is anomalous and should be removed.
Once these actions are taken (which should not be controversial in and
of themselves), the Board should, through training and strategic hiring,
assemble a rulemaking staff, develop a rulemaking agenda (consistent, of
course, with its continuing adjudicative responsibilities) and go forward
into the world of notice-and-comment rulemaking. If China can do it, so
can the NLRB!
[Epilogue: As this article was being prepared for publication, the
NLRB released for public comment a set of proposed rules governing notification on employee rights under the NLRA. See 75 Fed. Reg. 80,410,
(Dec. 22, 2010).]